Earnings Increase to High Levels Again in UK

The earnings report from the UK today was quite impressive. The average endings index headline increased to 3% 3M/Y as expected from 2.7% last month. This is the third increase in a row and it is quite a jump worth 0.3%, which is pretty decent for a month.

The employment figures missed expectations. The number of people claiming unemployment benefits increased by 20.2K against 4.3K expected. This increased the unemployment rate to 4.1% from 4.0% previously. This is the first increase in the unemployment rate this year, but it’s just a tick higher on a bearish trend.

Actual

Expected

Previous

Average Hourly Earnings 3M/Y

3.0%

3.0%

2.7%

Average Earnings Ex-Bonuses

3.2%

3.1%

3.1%

Unemployment rate

4.1%

4.0%

4.0%

Claimant Count Change

20.2K

4.3K

18.5K

As you can see from the table above, the earnings excluding bonuses increased by 3.2% against 3.1% expected. With non-bonus earnings increasing by 0.2% faster than overall earnings which include bonuses, we can conclude that bonuses are decreasing, or, at best, have been small.

Bonuses in Britain mainly come from the financial and banking sector, so this means that financial firms are holding on for the time being, or at worst, they are taking flight abroad ahead of Brexit.

About the author

Skerdian Meta
// Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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